RentalStarter - A Midwest Real Estate Investment Company

[cusdog]

Yea, I would avoid the whole getting paid in BTC thing. I understand why people are trying to suggest some currency risk mitigation strategies, but it is just not feasible in this case. Anybody who invests in this should treat it as a regular investment in a REIT on the NYSE. I can appreciate that your mention of it was merely a response to others rather than something you were advocating.

Your description of your market is both fascinating and makes me jealous.  

With respect to rehab (and other) costs, the key is to develop a systematic approach that minimizes subjective judgements and can be followed consistently from one activity to another. My suggestion would be something like this:

Step 1: Does this activity fall under "management"? If yes, then do not charge for my time/labour as this is covered by the management fee.

Step 2: If it is not management, then determine if the activity can be performed by a 3rd party for which the costs can be easily and clearly identifiable (i.e. there is a well known market with clear prices).

Step 3a: If you answered yes to 2, then bill the company the identifiable price less a reasonable discount (say 10%-20%) to be conservative.

Step 3b: If you answered no to 2, then bill the company based on cost of supplies + a premium to cover labour. You should have a clear labour rate for most activities, something like $20/hr (or w.e.) setup from the start.

Just spit-balling some ideas.

[1714284830]

1714284830

[Branny]

Yea, I would avoid the whole getting paid in BTC thing. I understand why people are trying to suggest some currency risk mitigation strategies, but it is just not feasible in this case. Anybody who invests in this should treat it as a regular investment in a REIT on the NYSE. I can appreciate that your mention of it was merely a response to others rather than something you were advocating.

Your description of your market is both fascinating and makes me jealous. 

With respect to rehab (and other) costs, the key is to develop a systematic approach that minimizes subjective judgements and can be followed consistently from one activity to another. My suggestion would be something like this:

Step 1: Does this activity fall under "management"? If yes, then do not charge for my time/labour as this is covered by the management fee.

Step 2: If it is not management, then determine if the activity can be performed by a 3rd party for which the costs can be easily and clearly identifiable (i.e. there is a well known market with clear prices).

Step 3a: If you answered yes to 2, then bill the company the identifiable price less a reasonable discount (say 10%-20%) to be conservative.

Step 3b: If you answered no to 2, then bill the company based on cost of supplies + a premium to cover labour. You should have a clear labour rate for most activities, something like $20/hr (or w.e.) setup from the start.

Just spit-balling some ideas.

They sound good to me, i'll have to figure a way to incorporate them and/or add them on the design document.

Additionally, we're looking at using a 3rd party auditor/accountant to audit our books on a regular basis to provide additional transparency.


Additionally - One thing I'm looking at/considering is using this as the primary 1st round for the core company and no other share offers. I talked to ukto about this and what my concept is would be to have the core company @ 100k shares ($110k USD or so) , then for subsequent ventures, issue a bond that pays high daily interest in order to acquire-rehab-refinance larger properties that the initial cashflow/reinvestment can't deal with. This would increase shareholder equity quite a bit i think and would help us access larger capital pools.

[cusdog]

Expanding your capital structure is a good idea. One suggestion I would have is that you make it clear to equity holders the seniority of bonds (if you decide to issue). I know it sounds obvious but there are varying levels of sophistication on here. I would also be a little wary of the fact that currency risk becomes a much bigger deal with bonds as compared to equity. I strongly suggest that you consider, at least, a soft BTC:USD peg on the bonds.

With respect to having a 3rd party audit, could you expand on what your expectations and goals for that would be?

[Branny]

Expanding your capital structure is a good idea. One suggestion I would have is that you make it clear to equity holders the seniority of bonds (if you decide to issue). I know it sounds obvious but there are varying levels of sophistication on here. I would also be a little wary of the fact that currency risk becomes a much bigger deal with bonds as compared to equity. I strongly suggest that you consider, at least, a soft BTC:USD peg on the bonds.

With respect to having a 3rd party audit, could you expand on what your expectations and goals for that would be?

The idea is just to create more levels of transparency to break out from the rest of the BTC listed companies on the various exchanges who don't even prepare financial reports, let alone submit themselves to audits.

[VJain]

Following and willing to invest up to 2-5BTC. Simply to help the non-BTC companies get off the ground . Who knows, might become a poster-child for how to use BTC and BTC Micro-investment to get startups off the ground (non-tech related ones included).

[Branny]

Following and willing to invest up to 2-5BTC. Simply to help the non-BTC companies get off the ground . Who knows, might become a poster-child for how to use BTC and BTC Micro-investment to get startups off the ground (non-tech related ones included).

That would be great

I've been reading over many of these forum threads for other securities and it seems that many have not run a business before thus leading to major complications. Transparency is our goal (We need it with the other product we're developing on rentalstarter).

[nebulus]

Okay, can you please elaborate further on what you are offering.

Your website tells that the investors get 60% of the net income.
Does the deal includes real estate equity as well?

Thanks!

[Branny]

Okay, can you please elaborate further on what you are offering.

Your website tells that the investors get 60% of the net income.
Does the deal includes real estate equity as well?

Thanks!

Investors have 100% equity in the company and subsequent real estate holdings. This includes equity in all the assets involved.

[Branny]

Tried to make some of the verbiage clearer on the website and some other things at the request of ukto. Looks like we'll be able to list it in the next day or two.

[ianp]

Are you still leaning toward bitfunder for the exchange?

[cusdog]

Gone through the document again. A couple of points:

1) I am glad you have included disclosure re: management partaking in repairs and rehab, although I think you still need more clarity beyond merely "We promise not to charge too much".

2) It appears that your 10% management fee comes off the top. Therefore I suggest you rephrase your definition of "net income" to include it being post management fee expense.

3)There is a good chance that the FMV per share could very well change from block #1 to #2 to #3, etc. I think you need to flesh out how exactly your secondary offerings are going to be priced. I could imagine a scenario, for example, in which you issues block#1 then over the course of 2 months the shares drift downward, at which point you issue block #2 at the suppressed levels and dilute the hell out of the existing shareholders.

4) Your "Dissolution" section is a bit weak. First, I think you should drop this buyback @110 nonsense. It is way to easy for management to abuse such a clause especially if it is not weighted or a historical average. We are not talking about a bond here. Second, it is not feasible for shares to be converted into a direct ownership stake in the RE. For a big chunk of your investors located outside of the US, it is not even legal.

I have more comments, but this is enough for now.

[Branny]

Are you still leaning toward bitfunder for the exchange?

Yes, may consider BTCT down the road.

[Branny]

Gone through the document again. A couple of points:

1) I am glad you have included disclosure re: management partaking in repairs and rehab, although I think you still need more clarity beyond merely "We promise not to charge too much".

2) It appears that your 10% management fee comes off the top. Therefore I suggest you rephrase your definition of "net income" to include it being post management fee expense.

3)There is a good chance that the FMV per share could very well change from block #1 to #2 to #3, etc. I think you need to flesh out how exactly your secondary offerings are going to be priced. I could imagine a scenario, for example, in which you issues block#1 then over the course of 2 months the shares drift downward, at which point you issue block #2 at the suppressed levels and dilute the hell out of the existing shareholders.

4) Your "Dissolution" section is a bit weak. First, I think you should drop this buyback @110 nonsense. It is way to easy for management to abuse such a clause especially if it is not weighted or a historical average. We are not talking about a bond here. Second, it is not feasible for shares to be converted into a direct ownership stake in the RE. For a big chunk of your investors located outside of the US, it is not even legal.

I have more comments, but this is enough for now.

#1 - On the management sub-page it states it  can't be beyond normal rates locally. I'm not sure the best way to define this outside of procuring rehab prices from multiple contractors then averaging. That would take a good deal of time to do especially for small projects.

#2 - Changed the term

#3 - I've been trying to figure a good way to address this. One option i thought of was to list the company on BF as an absolute max of 100,000 shares with no second or 3rd generations. If additional funding is needed I then would list a similar asset on BTCT as a bond only (No equity rights) and use that as hard money while we obtain traditional financing. This would increase share value while avoiding any dilution with the core company.

#4 -I could do historical average but then it would be pretty easy to manipulate too.

You're right about direct ownership, it just won't work. Liquidation will be the only option.

[Branny]

BF just approved our listing on BitFunder. A few items were changed but otherwise everything looks good. Please review terms as i haven't updated them on this thread (yet) but will do so shortly, or otherwise start a new thread here on bitcointalk.

[Exocyst]

Very interesting idea Branny. Definitely one to watch.

[nebulus]

Why did the price per share ended up being 0.011 instead of 0.01?

[Kushedout]

I'll say extra 10K sounds reasonable for the champagne, coke and bitches.

Never the less, I'll drop a BTC on this. I like the concept.

[Branny]

Why did the price per share ended up being 0.011 instead of 0.01?

When we first were going to issue shares, the price was .01 @ $125 per BTC.

It's fluctuating between $95-$105 over the past few days , so I decided to issue at .011 to get a little closer to the $125k goal on 100k shares issued.

I'll say extra 10K sounds reasonable for the champagne, coke and bitches.

Never the less, I'll drop a BTC on this. I like the concept.

So far, I only have enough for half a day as Charlie Sheen.

[MikkisJ]

In the description on BitFunder it says your first round is 50,000 shares, but in details page there are 70,000 issued shares. So you decided to sell 70,000 shares in the first round? And the second round will be 20,000 shares?

Also, what is the timeframe after you collect those $70,000? When will you buy property? How long after that to see dividends?

[MikkisJ]

And other contradicting information is that you say on your webpage "We will be issuing a total of 200,000 shares with a approximate value of $1.25/ea (Or .01btc) –  (Total of $250,000 of investment) in blocks of 10,000 shares per generation."